Stronger USD Drags Gold Below Crucial Support

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The first one is the Gold, where we were mistaken, at least in the short-term. Our view so far was bullish and I thought that the price should use the 1307 USD/oz as a support. Unfortunately for the buyers, the price broke that support and is currently heading lower. My initial setup got canceled but that does not mean that the whole bullish sentiment is gone. The price is still above the mid-term up trendline (blue) and is currently in a flag pattern, which should result with a further upswing. 1297 USD/oz looks like good support here. On the other hand, above the orange area, we do have a head and shoulders formation, which is already up and running. This formation is small though so the potential drop coming from it should not be lethal.

The next one is Dollar Index, where the price is showing the beauty of the false breakout pattern. After that, we usually should have a strong movement in the opposite direction and this is actually what is happening here. What is more, yesterday DXY broke the upper line of the wedge, which can be considered as a confirmation of the buy signal.

The lastt one is the USDCHF, which broke the super important horizontal resistance on 1. After the breakout, that area was successfully used as a support. Thursday brings us the highest levels since the 16 th  of November. The buy signal is ON!

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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